What is an overview of JCDecaux and how has the company evolved since its inception?
JCDecaux is the worldwide leader for outdoor advertising and the preferred partner of municipal authorities. We contribute to the development of cities worldwide by providing state-of-the-art street furniture and services to the public. JCDecaux partners with over 4,000 cities globally, including Paris where the company is headquartered. Our group is a family business that was created in 1964 by Jean-Claude Decaux, with an innovative business model which aimed to offer street furniture that would render a service to the public and cities free of cost, entirely financed through advertising revenues generated from these structures in the scope of long-term partnership agreements. The iconic piece of street furniture that JCDecaux started with was the bus shelter. It was a basic acknowledgement of the citizens' daily requirements and aimed to improve quality of life, facilitate mobility and offer a better experience in the city. This innovation and contribution to urban development has always been at the center of our business model. Our product offering has evolved through time to ensure relevancy to an ever-more connected and mobile audience. While we began with simple bus shelters offering shade and seating, today we accompany cities with smart street furniture that offer contextualized content based on real-time information for greater engagement, charging stations or wifi hotspots to remain connected at all times, or sustainable mobility systems with self-service bicycle schemes, that all contribute to make cities much more livable. In addition to these services, JCDecaux also contributes to a city's beautification with a strong commitment to aesthetics. Street furniture is indeed one of the first things you see whenever you walk the streets of any city, and its plays an integral role in the image of a city. JCDecaux partners with more than 50 international designers and architects (among which Stark, Villemotte, Zaha Hadid) to create iconic structures. In Muscat for instance, where we operate a 20-year street furniture programme with the municipality, we created an exclusive range of furniture that reflects the heritage of the city. More recently, we inaugurated a unique iconic digital structure in the heart of London, designed by Zaha Hadid. More than an advertising operator, we consider ourselves as a long-term partner of cities, contributing to create vibrant urban experiences.
How does JCDecaux approach the Abu Dhabi market, and what is your relationship with the Emirate?
Many nations in this region are developing a long-term diversification strategy, leveraging on transportation, connectivity and innovation, making the region and Abu Dhabi more specifically, a territory of opportunities for JCDecaux. We have been committed to Abu Dhabi since 2013 when we were awarded the exclusive advertising concession at Abu Dhabi International Airport. In May 2019, our successful partnership with the airport's authority was further acknowledged as JCDecaux was awarded a similar 10-year concession at the Midfield Terminal, a truly iconic infrastructure where we will be deploying a state-of-the-art digital offering. We are also having interesting discussions with municipal authorities and believe that the government strategy to promote PPPs is a very strong signal which highlights the role and contribution of the private sector to the long-term development of the country. In October 2018, we signed a MoU with the Department of Urban Planning and Municipalities of Abu Dhabi, and hold regular discussions with the newly created Abu Dhabi Investment Office to share best practices to encourage investment in the outdoor media platform and the street furniture platform locally.
What strategies does JCDecaux have to hedge against the effects of low oil prices?
Advertising budgets are indeed impacted by overall economic conditions and have been extremely challenged in the past few years following the economic crisis. Advertising investments in the UAE decreased by more than 60% according to the latest forecasts from ZenithOptimedia (a media agency monitoring advertising spend globally), as the crisis only intensified the impact of the digital disruption of our industry in recent years. Indeed, advertising spend on digital online media continues to grow exponentially, mainly driven by internet giants Google and Facebook. This accounted for almost one third of global advertising investment worldwide in 2018, to the detriment of “conventional media", including outdoor. However, JCDecaux has been able to deliver consistent growth in the region over the past 5 years, for 3 key reasons: a very selective approach to the market, a premium advertising platform that allows our clients to reach valuable audiences (business decision-makers, high-net-worth individuals, etc.); and continued investments in digital out of home to offer brands the possibility to contextualize communication therefore making it more relevant and engaging to the audience. In a similar way that online media serves targeted content (for instance, an ad at the airport could play in Russian when a flight lands from Moscow and switch to Hindi when a flight from Delhi arrives); finally, we also benefit from being a “glocal" organization, allowing us to extend reach to both regional and global brands.
Overall, how would you say JCDecaux differentiates itself?
Through regular contact with authorities worldwide, we have built best practices and defined a strong vision of how we can contribute to renewed urban experiences. This is through our ambitious out of home and digital out of home advertising programs that are based on long-term collaborative partnerships and aim to encourage innovation, entrepreneurship and investment. These are essential in leading the transformation of our business into the digital era.
What market trends will have the biggest impact on your industry?
In our industry today, digital disruption is having a major impact: as Elie Khoury, CEO of Omnicon Media Group MENA said, “USD1 of advertising investment out of every USD3 in the MENA region ends up in the Silicon Valley", and is not reinvested in the regional economy. We believe there is a major opportunity in this transformation for outdoor media to combine the reach of one of the only remaining mass-media channels available in the public space with precise targeting capabilities. By allowing digitization to engage specific audience profiles we would bring significant growth perspectives. Over the next few years, being able to contextualize content on real-time basis will be a major differentiating point, and this has already proven to be very positive in terms of driving the growth of our media. London recently decided to digitize most of its assets, especially on bus shelters, which has significantly contributed to the growth of outdoor advertising revenues for both digital and conventional formats. To leverage this opportunity, it will be essential to invest massively in the right tools, both on the hardware and software, and define an ambitious data strategy to qualify audiences and make communication much more agile and targeted.